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Hey guys,
I haven't had a mortgage in ages and am now helping my daughter buy her first house, and in reviewing her mortgage app with the estimated closing costs, regarding the q below, I have no good answer to give my daughter:
We're in IN, where RE tax is paid for the previous year, in arrears.
Her total cost to close doesn't show credit from seller for taxes for 2019-closing in Feb 2020
(when I bought here it was with cash so I didn't have this kind of doc -mortgage app- to review, and I received credit from seller for the prior year's taxes through closing date, I bought in Feb 2016 so got 14 mos credited). Nor does it reflect the earnest deposit.
I realize the loan app contains many estimated costs and is not final figures like a settlement statement but why not show known expected credit?
Ditto for the $1000 earnest money, it's not shown as a credit either.
Any reason for this? I know the settlement statement shall have true figures but my daughter is worried by this and I really had no explanation for her as to why these particular figures would not be included as they are known facts. I told her the settlement statement will be accurate and shall reflect all credits but can see her point, why would this doc differ on these two not-estimated figures.
Since they forgot to put down my $5000 earnest money - my suggestion is to ASK about anything you think should be on the estimate of closing costs. It happens and just goes to show that she is paying attention and reading the document.
As soon as I pointed out the missing earnest money on the document they made the correction and sent me an updated estimate of closing costs.
PS: I was paying cash and not taking out a mortgage - but, I still got and estimate of closing costs a week before closing which showed the closing costs for the buyer and seller. Is it possible what she received is just an estimate from her mortgage company and not an estimate of closing costs that shows both the costs for the buyer and seller and who pays for various items on the list?
Agree with Mary2014. Your daughter should be talking to the escrow officer about the earnest money and how the taxes work. The answers are NOT on the internet.
Agree with Mary2014. Your daughter should be talking to the escrow officer about the earnest money and how the taxes work. The answers are NOT on the internet.
We fully understand how taxes work. She wonders why the mortgage app doesn't reflect what the settlement statement shall, as to these two credits as they're known figures. Why not include on the app in the costs is all.
PS: I was paying cash and not taking out a mortgage - but, I still got and estimate of closing costs a week before closing which showed the closing costs for the buyer and seller. Is it possible what she received is just an estimate from her mortgage company and not an estimate of closing costs that shows both the costs for the buyer and seller and who pays for various items on the list?
Yeah, as you paid cash like I did what we saw and you're referencing is the settlement statement.
The docs I'm asking about are indeed the mortgage app with disclosures of estimated closing costs, yes.
But the two figures I'm not seeing are known and not estimated so why not include? They'll be on the settlement statement so why not show them on this doc? That's what she's asking me and i must agree, why not show them? Seems odd?
Yeah, as you paid cash like I did what we saw and you're referencing is the settlement statement.
The docs I'm asking about are indeed the mortgage app with disclosures of estimated closing costs, yes.
But the two figures I'm not seeing are known and not estimated so why not include? They'll be on the settlement statement so why not show them on this doc? That's what she's asking me and i must agree, why not show them? Seems odd?
When I did buy a house many years ago and needed a mortgage, only the mortgage company associated costs were estimated by the mortgage company. The other costs (even if known by the buyer ) were not included. Only a week before closing did the settlement statement reflect all costs - and even then it is possible that something gets left out by mistake.
Hey guys,
I haven't had a mortgage in ages and am now helping my daughter buy her first house, and in reviewing her mortgage app with the estimated closing costs, regarding the q below, I have no good answer to give my daughter:
We're in IN, where RE tax is paid for the previous year, in arrears.
Her total cost to close doesn't show credit from seller for taxes for 2019-closing in Feb 2020
(when I bought here it was with cash so I didn't have this kind of doc -mortgage app- to review, and I received credit from seller for the prior year's taxes through closing date, I bought in Feb 2016 so got 14 mos credited). Nor does it reflect the earnest deposit.
I realize the loan app contains many estimated costs and is not final figures like a settlement statement but why not show known expected credit?
Ditto for the $1000 earnest money, it's not shown as a credit either.
Any reason for this? I know the settlement statement shall have true figures but my daughter is worried by this and I really had no explanation for her as to why these particular figures would not be included as they are known facts. I told her the settlement statement will be accurate and shall reflect all credits but can see her point, why would this doc differ on these two not-estimated figures.
TIA
The Loan Estimate should show a credit for the earnest money, assuming the lender had A copy of the contract prior to issuing. Prorated taxes however would not be on the loan estimate.
Hey guys,
I haven't had a mortgage in ages and am now helping my daughter buy her first house, and in reviewing her mortgage app with the estimated closing costs, regarding the q below, I have no good answer to give my daughter:
We're in IN, where RE tax is paid for the previous year, in arrears.
Her total cost to close doesn't show credit from seller for taxes for 2019-closing in Feb 2020
(when I bought here it was with cash so I didn't have this kind of doc -mortgage app- to review, and I received credit from seller for the prior year's taxes through closing date, I bought in Feb 2016 so got 14 mos credited). Nor does it reflect the earnest deposit.
I realize the loan app contains many estimated costs and is not final figures like a settlement statement but why not show known expected credit?
Ditto for the $1000 earnest money, it's not shown as a credit either.
Any reason for this? I know the settlement statement shall have true figures but my daughter is worried by this and I really had no explanation for her as to why these particular figures would not be included as they are known facts. I told her the settlement statement will be accurate and shall reflect all credits but can see her point, why would this doc differ on these two not-estimated figures.
TIA
The Loan Estimate should show a credit for the earnest money, assuming the lender had A copy of the contract prior to issuing. Prorated taxes however would not be on the loan estimate.
The Loan Estimate should show a credit for the earnest money, assuming the lender had A copy of the contract prior to issuing. Prorated taxes however would not be on the loan estimate.
Thank you!
Yes she had a copy of the purchase agreement, so not sure why earnest money not shown?
I actually have an answer as to my other q, my daughter went ahead and texted the mortgage agent:
"For underwriting purposes we have to show total funds needed prior to credits so we can verify sufficient funds to close".
I get it now in a way; I was thinking this doc's figures should align exactly with what settlement statement will show (except for the estimated costs which may change of course) is all.
Another thing I noticed is some estimated costs are so inflated and will be far less ex: lender's title insurance is estimated at $800! This is realistically closer to $50-100.
I wonder if showing high estimates is to give the borrower a worst case idea of costs, so they're pleased when they get the HUD and actual costs are lower?
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